BC deficit half a billion dollars bigger than budgeted for 2012-13

British Columbia's projected deficit for the 2012-13 fiscal year has grown by $328 million since September and half a billion dollars since last February's budget.

Finance Minister Mike de Jong said he is confident, however, that in February the government will be able to present a balanced budget for next fiscal year, a commitment Premier Christy Clark reaffirmed yesterday. But unlike Clark, de Jong didn't rule out raising taxes to do it.

The new deficit figure, halfway through the budget year, is $1.469 billion.

The larger deficit comes despite collecting $308 million extra in personal and corporate income taxes. Those gains were more than offset by declines that included a delay in the sale of the Little Mountain property in Vancouver, lower than expected property transfer tax revenue and lower natural resource revenues.

"The shift in revenue from Little Mountain is fortuitous in that it shifts to the year government is trying to balance," said de Jong. The shift will move in the order of $290 million providing a windfall in the next fiscal year.

In the current year, along with the growing deficit, the government continues to seek $65 million in cuts from ministries to make up for a decline in natural gas revenues de Jong announced in September.

"There is virtually no room for any timed pre-election spending extravaganza," de Jong said.

Minister de Jong said he thinks it is appropriate to communicate the state of the province to the public. "My job is to question every expense and make decisions about priorities," he said.

As for the change in how breweries are taxed, which will most immediately affect Prince George's Pacific Western Brewing Co., de Jong said it didn't need to be approved by treasury board because it won't affect the government's budget.

"The fact is the advice in this case is there is and was no impact," he said. "I rely on the advice I'm given, and the advice is there is no impact."

The minister also declined to commit to keeping taxes at current levels. "At this stage of the game you're not in a position to rule anything out," he said. "People understand governments make decisions and they also understand in this case they also live in a jurisdiction with the lowest marginal rates in the country."

Yesterday, Premier Clark told a Tri-Cities Chamber of Commerce luncheon that people make better decisions about what to do with their money than governments make. "We are going to make sure that we keep taxes down for individuals," she said. "We are going to maintain the lowest taxes in Canada in this province . . . We need to leave more money in your pocket."

February's budget will include a forecast allowance and a surplus of around $200 million so that people can be confident it's realistic, said de Jong.

The NDP's Carole James said the government's spending contradicts the financial squeeze the province is in and shows the Liberals can't be trusted on the economy.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.